by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Steve Forbes argues in the latest issue of Forbes magazine that leading Democratic presidential candidates fail to understand wealth.
The publication of our “rich list” will fan the fevers of plundering politicians, especially those “soak the rich” Democratic presidential candidates looking for seemingly easy sources of loot to finance their socialist fantasies. They’re delusional.
To hear these White House wannabes tell it, you’d think the people on our 400 list are like the Disney character Scrooge McDuck, sitting in their money bins loaded with coins, gold, jewels and paper currency. Tax it, and voila! You’ve got all that lucre for your pet projects. It just ain’t so! Look at what the people on this list actually own, and you’ll quickly see that only a small portion of their assets are in ready cash. Anyone who’s ever owned a home or a car can attest to the distinction between property and cash.
A wealth tax would mean less wealth to tax. Taxing the mere possession of property and securities, by definition, makes them less valuable. Many people would have to sell assets to pay for the tax on what they own.
The value of an asset, especially a financial one, can be heavily influenced by the health of the economy. The radical tax and regulatory schemes (regulations are a form of taxation that today costs us nearly $2 trillion, which is more than the GDP of all but a handful of countries) proffered by the Democrats would slow the economy to a crawl. This, in turn, would cause tax revenues to fall far below expectations. Despite thousands of years of experience, these political hacks cavalierly assume that costly, burdensome rules and higher taxes don’t affect people’s ability to do business.